Alibaba bought a high stake in Intime Retail 2 years ago. Source:

Alibaba bought a high stake in Intime Retail 2 years ago. Source:

Alibaba has raised its stake in Chinese department store operator Intime Retail Group, and investors aren’t quite sure why, according to insights by Bloomberg.

In 2014, Alibaba made a $692 million investment in Intime Retail, a Chinese shopping mall and department store operator in the hopes of launching Online-to-offline services (O2O). Since then, the deal has not exactly gone quite as planned. On June 30, Alibaba announced that it will be upping its stake from 10% to a much larger stake of 28% ownership.

If Chinese physical retail were a growing business, the Intime deal would have made sense. As it would have if Alibaba had some great bricks and mortar insight that could turn Intime around, or if Intime’s stores offered synergies.

Back in 2014, O2O was a buzzword used by China’s internet giants, such as Alibaba and Tencent. Ecommerce giants thought that by simply connecting online users with offline services, they would be able to connect more deeply with consumer and spending habits. None of that was so simple back then, nor is it now.

Intime Retail’s business is in atrophy, like the rest of the offline retail industry in China. Store sales saw a drop in the same year that Alibaba acquired shares. The ecommerce giant was also unable to innovate the offline retail industry, as it built an empire luring customers away from traditional stores in the first place.

Alibaba increases stake in Intime retail

Intime investors do not seem excited by this announcement, as the stock is now 18.4% below the 97 cents Alibaba initially paid. Alibaba’s focus on offline ecommerce has not increased Intime’s profit margins and its on-going partnership has been somewhat understated.

It might have made sense for Alibaba to use Intime as a test bed for combining in-store shopping with online payments, and thus help its Alipay platform make the transition into the wider Chinese economy. Alibaba and Intime already did such testing four months before the investment was announced — labeling the pilot project a “successful O2O collaboration” — with no equity purchase needed.

With the success of Alibaba’s online marketplaces Tmall and Taobao, perhaps it doesn’t make sense for Jack Ma to expand further into offline retail when he’s built an empire to disrupt it.

A version of this article was published in Bloomberg on July 5. Read the full version here.


There are several factors drawing Chinese investors to look into the Indonesian market, e27 reported at the Convergence Ventures event.

Multi-Racial Background

According to Horizon-China & Feimalv Capital Founder Victor Yuan Yuan, Indonesia’s multiracial background makes it easier for foreign investors to bridge-the-gap between their own culture and that of locals. The country also has a “stronger Chinese connection” compared to other emerging markets. He also saw some similarities between Indonesian and Chinese technopreneurs.

Younger Demographics 

“The big innovation is done by people who are even younger [than most Asian markets]. If I look at the average age of innovators [in Indonesia] are younger than in China, so it’s even more promising,” Yuan said. When it comes to focus, Yuan believed that the service sector will remain popular in the next years. The investors will also focus on pre-Series A and Series A rounds of investments.

The big innovation is done by people who are even younger [than most Asian markets]. If I look at the average age of innovators [in Indonesia] are younger than in China, so it’s even more promising.”

The Gold Rush of Southeast Asia

The past year has seen China big players make their presence known in Indonesian tech startup scene. Alibaba had tried to expand its coverage in the country by launching Aliexpress before changing its strategy by acquiring Lazada in Southeast Asia. Alibaba’s competitor, JD, also has launched quietly last October. This article on Tech Crunch, urges business to “forget China because there is an ecommerce gold rush in Southeast Asia.”

“What we are going to do is set up a club, then probably an incubator, a multidimensional mechanism to support local startups,” he said. “Our own organisations will also invest in here, especially since this is a scalable market with [a] rising economy,” he added.

Likening today’s Indonesia to China seven years ago, he also called for local investors and businesses to collaborate together. As investments and attention has been turning to Southeast Asia, Indonesia in particular, there are factors that indicate how the region can be seen as China’s younger sister. However, the region is slowly catching up and showing a lot of potential, which explains why Chinese investors are looking in.


A version of this appeared in e27 on June 22. Read the full article here.